Maruti Suzuki, Still Good at present levels!
In recent time, there has been a great attraction of investors in Maruti Suzuki. Almost one year ago, the price of stock was around Rs 5000 which has now become Rs 10k. It means a 100 percent rise in past one year which is really a interesting thing for large caps.
Maruti Suzuki is one of the leader in automobile manufacturing which had shown a consistent growth with CAGR of over 30 percent in last few years. For the quarter ended September 2017, company had posted a profit of over Rs 2k crore. Currently, Maruti Suzuki holds the most valuable place in the automobile industry and has highest valuations i.e 3 lakh crore. But even after this number, stock has not entered in the list of expensive valuations holder. Financials and Balance Sheet of company are in very support to sustain this valuations and see new more highs.
But while we compare Maruti Suzuki with others, stock somewhat looks less attractive for short-term. As stock is already quoting at healthy valuations, i think now there could be a chance to see some good buying in other Automobile companies. For those who are already holding shares of maruti or wants to initiate a fresh buy position, it would be better to invest your money in minimum one other Auto sector company also. So that if Maruti Suzuki for some reasons not perform much good, other one could perform in long-term.
Rcom rose over 30 percent…..
One of the main reason behind this rally in rcom’s stock is that it could possible that we would see conversion of a part of debt i.e 7k crore into equity in the end of this month. Currently, stock is quoting around Rs 17, which makes around Rs 4,250 crore capital. And due to this, banks were not feeling comfortable to convert some debt into equity at this price because this will be a direct loss for the banks. Therefore, To convert a part of debt, it should be above Rs 25, and for best results, it should be around Rs 30 per share for easy conversion. If management has finally decided to convert some part of debt before the end of the year, i think we could see some more great buying in stock in next few days.
It could also possible that Company has sold some valuable assets which has not been declared yet. But I think Conversion of Debt into equity is the main reason for this rally.
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